China’s top leader, Xi Jinping, has a well-known aversion to any social spending, which he has derided as “welfarism” that he believes might erode the work ethic of the Chinese people.
“Even in the future, when we have reached a higher level of development and are equipped with more substantial financial resources, we still must not aim too high or go overboard with social security, and steer clear of the idleness-breeding trap of welfarism,” Mr. Xi said in a speech two years ago.
At the core of China’s current economic trouble is real estate, which represents a quarter of the country’s economic output and at least three-fifths of household savings.
When Mr. Zhou, the former central bank chief, unleashed a surge of borrowing in 2016, he triggered a frenzy of apartment construction even in remote cities like Qiqihar, a fading, frozen center of artillery manufacturing near the Siberian frontier. As easy credit sent apartment prices skyward, people in Qiqihar and throughout the country felt richer and flocked to car dealerships and other businesses to spend more money.
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